Natural gas futures tumble to 2-week low on mild weather
Forexpros - Natural gas futures fell sharply on Monday, slumping to a two-week low as mild weather forecasts and concerns about growing U.S. inventories continued to dominate market sentiment.
On the New York Mercantile Exchange, natural gas futures for December delivery traded at USD3.685 per million British thermal units during U.S. morning trade, tumbling 2.6%.
It earlier fell by as much as 2.85% to trade at USD3.659 per million British thermal units, the lowest price since October 24.
Industry weather group MDA Federal said Friday that it expected mostly milder-than-normal temperatures across the U.S. Northeast states over the next six-to-ten days.
Meanwhile, the Commodity Weather Group's six-to-ten-day forecast projected temperatures in the Northeast will be 3 to 5 degrees Fahrenheit (1.6 to 2.7 Celsius) above normal throughout the period.
Weather service provider AccuWeather expected temperatures in the Northeast and Midwest to average above-normal from November 7 to November 11, with daytime highs ranging from the mid-50s to low-60s degrees Fahrenheit (10 to 15 degrees Celsius).
Since the beginning of November, natural gas futures have fallen nearly 5.5%, as mild weather in key gas-consuming regions in the U.S. limited early-season heating demand.
Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting forecasts for late October and early November on heating demand.
Meanwhile, concerns over rising U.S. supply levels also weighed. Currently, 3.794 trillion cubic feet of gas is in storage, 5.6% above the five-year average, while the inventory shortfall relative to last year narrowed to just 0.4%.
U.S. inventories typically increase during the so-called "shoulder season", the period in autumn after air-conditioning demand falls but before heating begins.
But this year's increase, aided by unusually warm temperatures, offers a much larger cushion than in most years as winter approaches.
Elsewhere on the Nymex, light sweet crude oil futures for delivery in December rose 0.64% to trade at USD94.86 a barrel, while heating oil for December delivery jumped 1.35% to trade at USD3.111 per gallon.
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First Published on Nov 7, 2011 09:08 pm